19 April 2011

Expolanka Limited said it was keen to increase banana exports to the Middle East after it tasted success when its ‘Mo Fruit’ branded bananas reached Iran last month generating encouraging demand there. Europe is another destination the company is keen to exploit.

"Up to now Iran’s banana needs have been met by the Philippines, but as Iran’s current demand for bananas exceeds available supply, Expolanka Limited in keeping with its dare to do spirit, was quick to seize the opportunity to export bananas to Iran from Sri Lanka. Mo Fruit bananas were very positively received by Iran, so much so that Expolanka is now getting orders for more shipments from Iran as well as other countries," the company said in a statement.

While Expolanka is keen to get into agreements with local growers of Cavendish bananas, for regular supplies, the company is also looking to embark on its own cultivation of Cavendish banana, so that it can sufficiently meet its growing demand, it said.

Expolanka also hopes to increase banana exports to other markets of the Middle East as well as enter the European market, as demand for bananas and other fresh fruits and vegetables will continue to grow for many years to come in these markets. The expansion of the banana cultivation industry for export in Sri Lanka will of course aid the Sri Lankan economy by way of generating employment in rural areas, as well as contributing to the export earnings of the country.

Although Expolanka Ltd.’s banana exports to Iran began last month, the trade relationship between Expolanka and Iran and other Middle East countries spans several decades. Expolanka has been a main supplier of fresh and desiccated coconut to Iran since the early 1990s. Presently, in addition to Iran, Expolanka Ltd. exports Mo Fruit bananas to Dubai, UAE, and will soon be exporting them to other destinations as well.

"Homegrown brands are a vital element for the growth of an economy and is key in cotemporary business theory as branding adds value to a product. Especially in an agricultural market where products are similar and priced relatively low in the international market, branding can have a huge impact on the price that customers are willing to pay.

Brands add value to a basic product (or service), and thus branded products capture a bigger share of the market and command a higher price in comparison to their unbranded equivalents. Branding is also important when competitors brand their products, which is the case for bananas and other fresh fruits. In fact, companies of developed countries have acquired their profits due to this "last mile" of the trade process for a long time - by buying raw goods from developing countries and then adding value by branding the products through finishing, packaging, and marketing," the company said.

"Developing countries can and should also benefit from globalization and international trade in this way, by wealth-creation through the export of branded products such as Expolanka’s Mo Fruit bananas. Such initiatives will not only increase Sri Lanka’s GDP but also help for it to escape from the poverty cycle which many developing countries are fenced in. Other Sri Lankan corporate entities have wised up to this fact, for example MAS Holdings successfully launched its Amante lingerie brand in 2007 in the South Asian region. It is important to invest in branding and exploit market intelligence for organisations in the developing world, so that countries such as Sri Lanka can graduate from being a ‘supplier nation’ to a ‘producer nation’.

"Although there is tough competition from Central and South American countries as well as the Philippines and other countries in the banana export market globally, Expolanka is confident that it can sustain its current markets in the Middle East as well as capture new markets in the Middle East and Europe in the future, as Mo Fruit bananas (and other produce) promise the best quality and flavour, as they are grown in optimal climatic conditions and transported in keeping with the highest international standards.

With Expolanka’s quality-controlled operations, modern warehouses and cool storage facilities, as well as its financial strength, access to airlines and shipping companies, and reliable supplier network, it will retain its competitive advantage and be able to maintain its new Mo Fruit brand image, where ever it goes.

"Expolanka, was a pioneer in International Trade of agricultural commodities in Sri Lanka and is now a formidable diversified group with core strengths also in Transportation and Manufacturing, which includes the production of herbal pharmaceuticals as well as paper recycling/ waste management through Neptune Papers. Expolanka (Pvt.) Limited, Expolanka Holdings’ flagship company, was established in 1978 and since then has achieved great success and industry recognition. Expolanka Ltd. is now the market leader in the export of fresh fruits and vegetables and fresh coconuts and desiccated coconut from Sri Lanka.

Its international markets include Europe, the Middle East, Pakistan, and Africa. Expolanka Ltd. now also manufactures value-added products such as dried fruits, fruit juices, canned fruit, and ready-to-eat foods for both the international and domestic markets.

"Most of Expolanka Ltd.’s revenue is presently brought in by the export of fresh and desiccated coconut and fresh produce such as pineapples, papayas, tapioca (manioc), snake gourd, bread fruit, and green mangos. For example, Expolanka exports 3,000 kilos of pineapples every day only by air (more are sent by sea). However, Expolanka Ltd. sees big opportunities and a huge market for the export of bananas (as well as other fresh fruits) in the Middle East, Europe, and beyond. The export of branded under the Mo Fruit label is indeed a proud moment for Expolanka Limited, as well as Sri Lanka," the compay said.

Expolanka to raise 2.4bn through listingThe Colombo Stock Exchange recently announced that it had approved in principle the listing of 172 million ordinary voting shares of Expolanka Holdings Ltd at Rs. 14 each. This is expected to raise Rs. 2,408 million.

The subscription list would be opened on May 12, 2011.

John Keells Capital is the lead manager to the offer joined by CT Capital Pvt. Ltd.

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